CHANGE PROPERTY LTD

Executive Summary

Change Property Ltd is a newly formed real estate company currently exhibiting early-stage financial strain, reflected by negative working capital and net liabilities. Immediate focus on improving liquidity through capital injection and operational revenue growth is critical to stabilise the business. With proactive management and financial discipline, the company can move towards a healthier financial position.

CHANGE PROPERTY LTD - Analysis Report

Company Number: 15075770

Analysis Date: 2025-07-20 11:13 UTC

Financial Health Assessment for Change Property Ltd (As of 31 August 2024)

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1. Financial Health Score: D

Explanation:
Change Property Ltd shows signs of financial distress typical of a very young company still establishing itself. The negative net current assets and net liabilities indicate a "symptom of distress" — insufficient short-term liquidity to cover immediate debts. While this is not unexpected in the first year of trading, it necessitates close monitoring and corrective actions.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	655	Very low cash and receivables, indicating limited liquid resources.
Current Liabilities	3,981	Obligations due within one year exceed current assets, leading to working capital deficit.
Net Current Assets (Working Capital)	-3,326	Negative working capital, indicating potential short-term liquidity issues ("unhealthy cash flow").
Net Assets (Equity)	-3,926	Total liabilities exceed total assets, showing a net deficit and "financial weakness."
Shareholders Funds	3,926 (negative)	Reflects accumulated losses or capital deficiency; shareholders’ investment is not sufficient to cover liabilities.

Additional observations:

• Micro-entity status limits filing requirements but also suggests small scale of operations.
• One employee on average during the year, indicating minimal operational scale.
• No audit required, so figures are unaudited but compliant with micro-entity standards.
• Directors’ resignation mid-year could imply changes in management focus or restructuring efforts.

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3. Diagnosis

The company is in an early "growth phase" but currently exhibiting "symptoms of financial strain": a negative working capital position and a net liability position signal insufficient liquidity and solvency challenges. This is common in new companies, especially in capital-intensive sectors like real estate acquisition and management.

The negative net assets indicate that liabilities are greater than assets, a "balance sheet illness" that might undermine the company’s ability to secure additional finance or credit on favourable terms. The minimal current assets suggest the company may struggle to meet short-term obligations without additional capital infusion or revenue growth.

The resignation of two directors in June 2024 could be a response to the financial strain or a strategic reorganisation, which should be monitored for impact on governance and operational stability.

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4. Recommendations

• Improve Liquidity: Seek short-term financing options such as shareholder loans or overdrafts to alleviate immediate working capital shortages. This will help restore a "healthy cash flow" and reassure creditors.

• Capital Injection: Consider additional equity funding from existing or new investors to improve net asset position, addressing the "capital deficit" symptom.

• Operational Focus: Accelerate revenue-generating activities in real estate transactions or leasing to increase current assets. Prioritise efficient rent collection and debtor management.

• Cost Control: Maintain lean operations given the micro-entity scale. Avoid unnecessary overheads to prevent exacerbating liquidity issues.

• Governance Stability: Ensure the current director’s leadership is stable and supported by adequate financial oversight. Transparent communication with stakeholders about financial strategy will build confidence.

• Regular Monitoring: Implement monthly cash flow forecasts and financial health checks to detect early warning signs and respond promptly.

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